But New CFI Survey Shows Senate Candidates
Use Electronic Software To Prepare The Reports

What makes the Senate so special that it exempts itself from a key
requirement of campaign finance disclosure law that applies to everyone
else, including candidates for the House of Representatives and
Political Action Committees?

Last week, all political committees active in federal
elections had to submit their quarterly financial reports for
disclosure by the Federal Election Commission (FEC). Almost
instantaneously, journalists, watchdog groups and other citizens were
able to download the reports from the FEC website and conduct computer
searches to learn about the specific contributions and expenditures of
individual candidates for the House of Representatives, non-Senate
national party committees and Political Action Committees (PACs). But
they could not do the same for Senate candidates and parties because of
the Senate’s insistence on paper rather than electronic filing.1
In addition, although the FEC prepares a “disclosure database” of all
reports, searchable on the website, the Senate portion of that database
is delayed by the Senate’s refusal to countenance electronic filing.

As a result, while the Senate takes crucial votes in the
next days and weeks on such issues as Iraq, energy and Medicare, voters
will remain in the dark on key aspects of Senate campaign finance for
as long as a month or more. The problem will get even worse a year from
now. When voters go to the polls in November 2004, they will have
relatively little information from Senate candidate and party
disclosure pre-election reports covering the critical fundraising
months from July through October. From the voter’s perspective, most of
these reports might just as well not exist.

The great irony is that, while they refuse to file
electronically, Senators and Senate candidates are in fact using
electronic software to compile their campaign finance reports! But, in
conflict with the public interest in timely disclosure, they prefer to
print these reports on paper and mail them in, rather than file them
electronically. Senators seem unwilling to employ the technology they
use to run their offices and websites to empower their own constituents.

Detailed
Senate Campaign Finance Information is Effectively Unavailable to the
Public for Up to a Month or More, Depriving Citizens of Relevant
Information When They Need It Most

The gold standard
for contemporary campaign finance disclosure -- at both the federal and
state levels -- is electronic filing. Electronic reports are
transmitted instantly, and are more accurate than paper submissions
because software can require or prompt correction of mistakes and
error-prone, hand entering of data is eliminated). Most important, the
data in the reports can be rapidly “searched” via the Web for answers
to specific, relevant questions.

Concerning federal campaign finance reports, there are two
stages of electronic public disclosure. In the first, computer-savvy
journalists and citizens no longer have to go through the dozens (or
even hundreds) of pages filed by individual House candidates, parties
or PACs to figure out the major donors and their employers, and the
major recipients of campaign spending2.
Instead, they can download a just-filed report from the FEC website
onto their personal computers, and then search for and locate the
critical information they need. But they cannot do this for Senate
candidates or Senate party committees.

Since Senate reports are submitted on paper rather than
electronically, the only way a journalist or citizen can obtain
revealing information from a just-filed form is to read through a
lengthy paper report on the FEC website, proceeding page by page rather
than via key search words, and taking scrupulous notes on contributions
and expenditures. Since this process is so time consuming, it occurs
infrequently and there is little effective public disclosure of newly
filed information (Additional frustration comes from attempts to
decipher figures that may be obscured or blurred by the process of
transmitting images of paper reports from the Secretary of the Senate
to the FEC. This indirect process of filing with the FEC is the result
of another special Senate legal exemption).

In the second, somewhat slower, stage of electronic
disclosure, the FEC incorporates the most important contributions data
from all reports into a disclosure database, which can be searched on
the Web by those with minimal computer literacy. This database is very
useful not only because it allows convenient access to information from
the individual Senate reports, but also because it can answer such
broad, comparative questions as, “Who are all the donors to federal
campaigns working at XYZ Corporation who gave $1,000 or more to
congressional campaigns, and how much did each candidate receive?”

But due to the Senate paper filing, the Senate portion of
the database is available to journalists and voters significantly later
than that of the House of Representatives, hampering timely public
judgments about Senate candidates and legislative actions. There are
two reasons for the delay. To begin with, the law accommodates
certified or registered mailing of Senate paper reports on the date
they are due, slowing their arrival at the FEC. Then the FEC is forced
to do more processing of Senate paper reports than of House electronic
ones. This involves printing or copying the Senate reports (up to
10,000 pages a day during busy periods, according to the FEC)
hand-coding various types of transactions that cannot be automatically
processed, and keypunching the data into the electronic database. Not
only must the FEC pay for copying and extra labor, the Senate documents
also have to be shipped to an outside contractor in Fredericksburg,
Virginia. In contrast, House electronic reports are processed more
quickl y because no copying or keying is necessary, and a substantial
amount of coding occurs automatically.

Table 1 shows the differences in time of processing
between House and Senate quarterly and year end reports for the last
six filing periods available. According to FEC officials, establishing
the electronic filing system in 2001-02 produced a variety of problems
that extended the processing time for House reports. But major
improvements occurred during the last three filing periods (Year end
2002 and the first two quarters of 2003). Focusing on this later phase,
one finds that it took an average of nearly 18 days after receipt at
the Senate for the FEC to finish final processing of 75% of the
reports, as opposed to a little more than 10 days for House processing
to reach that level. To obtain 95% completion took 27 days for the
Senate and a little over 20 days for the House. As the last line of the
table shows, it took the FEC a week or so longer to bring Senate
reports to the various filing thresholds (25%, 50%, 75% and 95%
completed) than House ones.

An 18 or 27 day wait for detailed Senate information on a
substantial majority of reports may not seem like a big deal, but it
is. Final Senate disclosure reports, covering the first half of
October, are due 12 days before Election Day. The previous reports,
covering July through September, are due October 15, 17-23 days before
Election Day. Electronic filing makes it possible, in principle, to
rapidly analyze House and PAC reports, and publicize them, before the
election, when the information might be useful for voters. On the other
hand, information from the late Senate paper reports is effectively
available, to a large extent, after the election. It might as well be
stalled another six years.

TABLE 1

TIME IN DAYS BETWEEN RECEIPT DATE AND
COMPLETION DATE FOR DIFFERENT THRESHOLDS OF HOUSE AND SENATE CAMPAIGN
FINANCE REPORTS

Senate Candidates Use Software to Compile but not to File Campaign Finance Reports, Thwarting Rapid Disclosure

A new CFI survey reveals that the Senate’s failure to provide its
constituents with electronically disclosed, timely information occurs
even though Senators and Senate candidates are actually, for their own
convenience, using electronic software in compiling their paper
reports! Almost all Senate incumbent and challenger reports are filled
out with electronic software and then printed out and sent to the
Secretary of the Senate. So the Senators get the convenience and
flexibility (e.g. in manipulating contributor lists for direct mail
purposes) of an electronic database, while denying its advantages to
the public.

CFI conducted a phone survey of existing Senators and
Senate candidates who were unsuccessful in the 2002 general election.
We asked each campaign what, if any, software program was used to
prepare the candidate’s filings. The FEC itself offers free software.
It also publishes an extensive list of “software options,” listing 31
companies which have notified the Commission that they are
“implementing electronic filing”. If a campaign is already using one of
these programs to compile its reports, there should be very little, if
any, cost associated with compulsory electronic filing of those
reports. In fact, there should be a considerable saving on copying and
mailing costs. Even if a campaign is using another software program,
that too will be acceptable to the FEC provided it can produce and
upload properly formatted files.

As Table 2 shows, only one of the 99 (out of 100) Senators who responded3
said his or her campaign compiled reports by hand; the other 98 used
some form of electronic software to fill out the FEC forms before
printing them out for delivery to the Secretary of the Senate. Of
these, 93 or almost 95% used the FEC’s own or listed software4.
Four other Senators used either a proprietary system built for their
individual use or other non-listed software. Finally, one Senate office
did not report the type of software used. Since almost all Senate
incumbents’ campaign finance reports already exist in a form that
conforms to the requirements of electronic filing, mandating that
senators file their reports electronically would entail very little if
any expense for incumbent campaigns. In fact, it would save them money
on printing and copying costs.

Furthermore, the great majority of unsuccessful Senate
candidates in 2002 also used software packages to compile their
reports. We received responses from 29 out of 30 major party candidates.5 Of these, 22, over three-quarters, used the FEC’s own or listed software6.
Two other candidates used non-FEC listed software. Only five candidates
prepared their forms by hand. Of these, two spent virtually nothing on
their campaigns, and three spent between approximately $1 and $3
million. Other Senate candidates who spent relatively little for Senate
campaigns used the free FEC file or purchased other software. We
conclude that requiring the unsuccessful candidates to file
electronically would have entailed little if any additional expense for
them, and would probably have saved the great majority of them money on
printing and copying costs.

Policy Recommendations

In its 2003 legislative recommendations, the FEC requested:

Mandatory
electronic filing for statements or reports pertaining to Senate
elections for persons or committees having or expecting to have
aggregate contributions or expenditures in excess of $50,000 a year; and

Forwarding
to the FEC of Senate-filed electronic reports within 24 hours of
receipt, and accessibility of such reports on the Internet

These recommendations follow years of unsuccessful FEC efforts to
subject Senate filings to the same criteria as other campaign finance
reports. Congress should translate the recommendations into law. In an
era of increased information access – when citizens can type in key
words in a computer to capture information they need quickly – it is a
glaring contradiction that one of the foremost democratic legislative
bodies in the world denies such access to its own constituents. The
inconsistency is compounded by the fact that this body is using the
same technology it would normally use for campaign finance reporting,
but appropriating the benefits only for itself.

This report was written by Steve Weissman with the
assistance of Nicholas Turner, Kimberly Conger, Jillian McKnight and
Paul Zummo.

***

The Campaign Finance
Institute is a non-partisan, non-profit institute affiliated with the
George Washington University that conducts objective research and
education, empanels task forces and makes recommendations for policy
change in the field of campaign finance. It is supported by generous
grants from The Joyce Foundation, Open Society Institute, The Pew
Charitable Trusts, and Smith Richardson Foundation. Statements of the
Campaign Finance Institute and its Task Forces do not necessarily
reflect the views of CFI’s Trustees or financial supporters. For
further information about CFI, visit the web site at
http://www.CampaignFinanceInstitute.org.

Footnotes: 1. All
political committees having, or expecting, an aggregate of $50,000 in
contributions or expenditures in a calendar year must, under a law in
effect since 2001, file electronically – except for Senate committees.

2. According to the FEC about 80% of House candidate or party reports
are electronically filed, and these cover an even greater proportion of
total House campaign finance.

4. The most widely used software programs for sitting Senators were:
Aristotle Campaign Manager, with 46 users and NGP Campaign Office, with
24, though it should be noted that NGP only provides software to
Democratic candidates. Ten Senators used the FEC’s free software.

The Campaign Finance Institute is a non-partisan, non-profit institute
affiliated with the George Washington University that conducts
objective research and education, empanels task forces and makes
recommendations for policy change in the field of campaign finance. It
is supported by generous grants from the Joyce Foundation, Smith
Richardson Foundation and The Pew Charitable Trusts. For further
information, visit the CFI web site at www.CFInst.org.